1 00:00:02,440 --> 00:00:10,480 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:10,520 --> 00:00:13,720 Speaker 1: Daybreak Asia podcast. I'm Doug Krisner. You can join Brian 3 00:00:13,800 --> 00:00:16,640 Speaker 1: Curtis and myself for the stories making news and moving 4 00:00:16,680 --> 00:00:19,560 Speaker 1: markets in the Apec region. You can subscribe to the 5 00:00:19,600 --> 00:00:23,080 Speaker 1: show anywhere you get your podcast and always on Bloomberg Radio, 6 00:00:23,320 --> 00:00:26,080 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business app. 7 00:00:27,280 --> 00:00:27,480 Speaker 2: Well. 8 00:00:27,520 --> 00:00:30,600 Speaker 3: Our Kago's Capital management founder Bill Huong has been found 9 00:00:30,640 --> 00:00:34,559 Speaker 3: guilty of criminal charges stemming from his firm's collapse in. 10 00:00:34,560 --> 00:00:35,440 Speaker 4: Twenty twenty one. 11 00:00:35,720 --> 00:00:39,080 Speaker 3: Joining us now is our reporter on this story, Chris Dolmetz, 12 00:00:39,120 --> 00:00:43,600 Speaker 3: who's a Bloomberg US legal reporter. So, Chris, what were 13 00:00:43,760 --> 00:00:47,400 Speaker 3: the key factors here in the prosecution's case that led 14 00:00:47,440 --> 00:00:50,280 Speaker 3: to this conviction? Do they go mainly by the name 15 00:00:50,360 --> 00:00:52,440 Speaker 3: of William Tomita and Scott Becker? 16 00:00:54,000 --> 00:00:56,720 Speaker 5: Yeah, pretty much, And you can you can say that 17 00:00:57,600 --> 00:01:01,240 Speaker 5: Tomito was pretty much the nail and the coffin for 18 00:01:01,360 --> 00:01:06,640 Speaker 5: Phil Uh. He testified over more than two weeks. He 19 00:01:06,800 --> 00:01:09,959 Speaker 5: kind of laid out a real pattern and how they 20 00:01:09,959 --> 00:01:15,000 Speaker 5: would manipulate the stocks and buying auctions before the before 21 00:01:15,080 --> 00:01:18,039 Speaker 5: the market opening, and well that that you could buy 22 00:01:18,120 --> 00:01:21,280 Speaker 5: before the market open and close to the clothes in 23 00:01:21,360 --> 00:01:24,520 Speaker 5: order to douce the stocks and push the empire and 24 00:01:24,640 --> 00:01:27,400 Speaker 5: you know, try to increase the valuation in stocks so 25 00:01:27,560 --> 00:01:29,959 Speaker 5: that their their portfolio got bigger and bigger. 26 00:01:30,720 --> 00:01:33,880 Speaker 1: What about the counter parties, Chris firms like Credit Suite 27 00:01:34,160 --> 00:01:36,319 Speaker 1: and and UBS Group. 28 00:01:37,959 --> 00:01:41,400 Speaker 5: Yeah, so those were you know, there were multiple witnesses 29 00:01:41,440 --> 00:01:43,880 Speaker 5: from the counter party to laid out and kind of 30 00:01:43,959 --> 00:01:49,040 Speaker 5: detail how you know, what they told them that final 31 00:01:49,080 --> 00:01:52,680 Speaker 5: week and leading up to that final week, about their investments, 32 00:01:52,720 --> 00:01:57,120 Speaker 5: about how much credit they had at other counterparties, and 33 00:01:57,560 --> 00:02:01,559 Speaker 5: really you know, how spread thin they were during that time, 34 00:02:01,600 --> 00:02:07,680 Speaker 5: which really the government laid out. Their theory was that 35 00:02:07,680 --> 00:02:11,720 Speaker 5: that Quong and these and the CFO lied to the 36 00:02:11,760 --> 00:02:14,800 Speaker 5: bank to get more credit in order to trade more 37 00:02:14,840 --> 00:02:17,080 Speaker 5: and that was kind of key to the marketing opulation 38 00:02:17,200 --> 00:02:19,840 Speaker 5: because they wouldn't have been able to trade in those 39 00:02:19,880 --> 00:02:24,120 Speaker 5: sides had they not told the banks Bibbs about you know, 40 00:02:24,360 --> 00:02:27,679 Speaker 5: how much investments they had, where those investments were, how 41 00:02:27,720 --> 00:02:31,040 Speaker 5: liquid those investments were, and how much credit they had 42 00:02:31,080 --> 00:02:31,720 Speaker 5: at the other bank. 43 00:02:32,480 --> 00:02:37,280 Speaker 3: It's astonishing the demise of our Chagos ultimately fueling the 44 00:02:37,400 --> 00:02:41,359 Speaker 3: demise of credit sueeze to think that one trader, one 45 00:02:41,440 --> 00:02:45,239 Speaker 3: bad apple, whoever it is, could bring down a legendary 46 00:02:45,360 --> 00:02:49,240 Speaker 3: Swiss bank. It really just seems to suggest that the 47 00:02:49,320 --> 00:02:52,239 Speaker 3: regulators were asleep at the wheel or something like that. 48 00:02:54,040 --> 00:02:56,919 Speaker 5: Yeah, there is definitely that fun of that. I mean, 49 00:02:57,000 --> 00:02:59,920 Speaker 5: obviously there are many other factors and we didn't mind 50 00:03:00,040 --> 00:03:02,920 Speaker 5: in credit sweep, but this is kind of one of 51 00:03:02,919 --> 00:03:06,440 Speaker 5: the big dominoes that that started to change, that led 52 00:03:06,440 --> 00:03:10,840 Speaker 5: those down call and you know, it kind of probably 53 00:03:11,040 --> 00:03:14,040 Speaker 5: led regulators to trying to take a boat to look 54 00:03:14,080 --> 00:03:17,280 Speaker 5: at some of these family offices and you know how 55 00:03:17,320 --> 00:03:21,320 Speaker 5: they were investing. Really the way that was investing through 56 00:03:21,360 --> 00:03:26,120 Speaker 5: these block transactions kind of concealed what he was actually doing. 57 00:03:26,200 --> 00:03:28,639 Speaker 5: And that's kind of seemed to the whole scheam is 58 00:03:28,720 --> 00:03:31,840 Speaker 5: that if he was training of you know many do 59 00:03:32,240 --> 00:03:37,080 Speaker 5: by buying securities, and his defense alleged that, you know, 60 00:03:38,120 --> 00:03:41,119 Speaker 5: they argued that he was you know, he was long 61 00:03:41,160 --> 00:03:44,000 Speaker 5: in these because he believed in these companies. He wasn't 62 00:03:44,040 --> 00:03:47,760 Speaker 5: just trading to get the places higher. He thought these 63 00:03:47,880 --> 00:03:51,680 Speaker 5: was a good investment. But in the end, you know, 64 00:03:52,320 --> 00:03:54,600 Speaker 5: there were they were not that liquid and that was 65 00:03:54,640 --> 00:03:57,800 Speaker 5: the problem because when when the margin call team during 66 00:03:57,800 --> 00:04:00,240 Speaker 5: that last week he wasn't able to settle, and then 67 00:04:00,280 --> 00:04:03,680 Speaker 5: that ultimately went denied. So if the regulators had been 68 00:04:03,720 --> 00:04:06,560 Speaker 5: able to see that he was trading in regular styt 69 00:04:06,480 --> 00:04:09,640 Speaker 5: of like a robo bog investor would do where they would, 70 00:04:10,640 --> 00:04:13,960 Speaker 5: they would buy the shares and therefore have voting likes. Instead, 71 00:04:14,800 --> 00:04:17,200 Speaker 5: the banks were the ones signing the shared All right. 72 00:04:17,120 --> 00:04:18,800 Speaker 1: Chris, we'll leave it there. Thank you so much here 73 00:04:18,839 --> 00:04:23,200 Speaker 1: for joining us. Chris Dolmach Bloomberg US legal reporter on 74 00:04:23,240 --> 00:04:29,680 Speaker 1: the line. 75 00:04:30,680 --> 00:04:33,960 Speaker 3: We're joined now by Eddie Lowe, chief investment officer of 76 00:04:34,080 --> 00:04:38,359 Speaker 3: Maybank Group Wealth Management. Eddie, we can talk about j 77 00:04:38,600 --> 00:04:41,120 Speaker 3: Powell and the Fed, but I wanted to talk about 78 00:04:41,200 --> 00:04:42,240 Speaker 3: earnings for a moment. 79 00:04:42,960 --> 00:04:46,239 Speaker 4: We got the sales. 80 00:04:45,120 --> 00:04:51,039 Speaker 3: Numbers from TSMC yesterday, a second quarter of sales at 81 00:04:51,040 --> 00:04:55,039 Speaker 3: the fastest pace since twenty twenty two. Now we will 82 00:04:55,040 --> 00:04:57,600 Speaker 3: get the earnings next week, but at least this is 83 00:04:57,640 --> 00:05:00,719 Speaker 3: an indication at some of the gains that we've seen 84 00:05:00,800 --> 00:05:05,520 Speaker 3: in TSMC stock, you know, could be justified your thoughts 85 00:05:05,640 --> 00:05:08,440 Speaker 3: on some of these leading players in the AI sphere. 86 00:05:09,640 --> 00:05:13,920 Speaker 6: All right, well, if you look at the global equities 87 00:05:14,640 --> 00:05:17,720 Speaker 6: performances year. It has been a stellar first half, and 88 00:05:17,920 --> 00:05:20,240 Speaker 6: a lot of this is actually driven by earnings growth 89 00:05:20,680 --> 00:05:24,119 Speaker 6: from the tech and AI related stocks, so the likes 90 00:05:24,160 --> 00:05:29,760 Speaker 6: of TSMC and Video for example, And for US coming quarter, 91 00:05:30,200 --> 00:05:34,800 Speaker 6: we do expect earnings growth to accelerate, especially for the 92 00:05:34,839 --> 00:05:39,240 Speaker 6: SMP five hundred versus the first quarter. But we do 93 00:05:39,360 --> 00:05:44,160 Speaker 6: highlight to our investors and clients that, hey, well, I 94 00:05:44,200 --> 00:05:46,960 Speaker 6: think there are merits to focus on the tech sector, 95 00:05:47,839 --> 00:05:53,240 Speaker 6: but let's not ignore the non tech sectors, because there 96 00:05:53,240 --> 00:05:55,919 Speaker 6: are beneficiaries from the non tech sector from the progress 97 00:05:55,920 --> 00:05:59,440 Speaker 6: and technology, and we are seeing signs of earnings growth 98 00:05:59,520 --> 00:06:03,960 Speaker 6: broadening out beyond the tech sector. So given the fact 99 00:06:04,000 --> 00:06:07,279 Speaker 6: that SMP five hundred equal weighted in terms of valuation 100 00:06:07,520 --> 00:06:10,320 Speaker 6: is much more lower than SMB five hundred on a 101 00:06:10,360 --> 00:06:13,000 Speaker 6: market cap data basis, we think their merits to look 102 00:06:13,080 --> 00:06:17,719 Speaker 6: beyond the tech sector into other sectors including financials, energy, 103 00:06:19,080 --> 00:06:19,960 Speaker 6: and industrials. 104 00:06:20,080 --> 00:06:22,279 Speaker 1: So, as I understand what you're saying, I mean these 105 00:06:22,440 --> 00:06:25,919 Speaker 1: other industries would be big beneficiaries of the adoption of 106 00:06:26,000 --> 00:06:27,800 Speaker 1: AI in their business models. 107 00:06:27,839 --> 00:06:32,000 Speaker 6: Is that right, Well, we've believed that the adoption of 108 00:06:32,160 --> 00:06:36,440 Speaker 6: AI could actually benefit a range of industries. Yes, so 109 00:06:36,640 --> 00:06:38,680 Speaker 6: I think some of the sectors that mentioned just now, 110 00:06:38,839 --> 00:06:42,280 Speaker 6: financial industrials, they are definitely prime beneficiaries. 111 00:06:43,320 --> 00:06:46,000 Speaker 3: So financial is about the only sector really that has 112 00:06:46,120 --> 00:06:48,320 Speaker 3: kind of matched tech in the S and P five 113 00:06:48,400 --> 00:06:52,440 Speaker 3: hundred so far this year. The rest of the area's 114 00:06:52,560 --> 00:06:55,800 Speaker 3: materials and industrials we've had some rallies, particularly in the 115 00:06:55,800 --> 00:06:58,719 Speaker 3: first quarter, but it sort of died in the second quarter. 116 00:06:59,000 --> 00:07:00,880 Speaker 4: Do you expect that to pick up anytime soon? 117 00:07:03,000 --> 00:07:08,880 Speaker 6: Well, we are actually seeing a very interesting phenomenon acting 118 00:07:08,960 --> 00:07:10,920 Speaker 6: in the first half performance of S and B five hundred, 119 00:07:11,040 --> 00:07:14,080 Speaker 6: where no doubt, you know, the tech and air related 120 00:07:14,160 --> 00:07:17,600 Speaker 6: sectors are the UH performers, But if you actually apply 121 00:07:18,720 --> 00:07:22,600 Speaker 6: sector types from a month to month basics, we actually 122 00:07:22,600 --> 00:07:28,080 Speaker 6: see variation in monthly leadership. For example, I think sometime 123 00:07:28,320 --> 00:07:30,400 Speaker 6: in the earlier part of us QB we were actually 124 00:07:30,440 --> 00:07:35,400 Speaker 6: advocating overweight in materials and energy sectors and that played 125 00:07:35,400 --> 00:07:38,720 Speaker 6: out well. So at this juncture we thought that energy 126 00:07:38,880 --> 00:07:42,720 Speaker 6: socks could be an interesting option because of the fact 127 00:07:42,720 --> 00:07:45,560 Speaker 6: that it has actually somewhat like recently, plus the fact 128 00:07:45,640 --> 00:07:48,720 Speaker 6: that it could serve as an interesting hatchickens lingering geoe 129 00:07:48,760 --> 00:07:52,640 Speaker 6: political risks being in the Middle East or in Russia, Ukraine. 130 00:07:53,000 --> 00:07:56,160 Speaker 1: How much of your thesis is predicated on the notion 131 00:07:56,200 --> 00:07:58,480 Speaker 1: that we're going to get two FED rate cuts this year. 132 00:08:00,440 --> 00:08:03,800 Speaker 6: We are actually off the view that we are going 133 00:08:03,880 --> 00:08:07,320 Speaker 6: to get two weight cuts from the FAT this year. 134 00:08:07,520 --> 00:08:11,200 Speaker 6: That is our base view. If you look at what 135 00:08:11,240 --> 00:08:15,640 Speaker 6: Powell has said, he acknowledged progress and inflation, although still 136 00:08:15,640 --> 00:08:19,360 Speaker 6: waiting for more evidence, but he did say that the 137 00:08:19,400 --> 00:08:21,320 Speaker 6: FAT does not need to wait for CPI to hit 138 00:08:21,360 --> 00:08:24,400 Speaker 6: two percent before the FAT will start cutting rates. And 139 00:08:24,440 --> 00:08:26,800 Speaker 6: I think one thing to notice is that there are 140 00:08:26,880 --> 00:08:30,680 Speaker 6: mountain signs of calling jobs market. Employment is taken higher 141 00:08:30,720 --> 00:08:33,600 Speaker 6: to four point one percent, while due nonvoune pay rolls 142 00:08:33,640 --> 00:08:36,200 Speaker 6: were slightly better than expected, but may pay rolls were 143 00:08:36,240 --> 00:08:42,320 Speaker 6: actually significantly revised lower. So barring any significant upside surprises 144 00:08:42,320 --> 00:08:45,439 Speaker 6: and inflation, we think that, you know, the soft job 145 00:08:45,480 --> 00:08:49,360 Speaker 6: market could actually give FAT another reason to start cutting 146 00:08:49,400 --> 00:08:50,000 Speaker 6: rates this year. 147 00:08:50,600 --> 00:08:52,319 Speaker 3: So it seems like there are a couple of reasons 148 00:08:52,360 --> 00:08:55,160 Speaker 3: why you see huge out performance of some of those 149 00:08:55,400 --> 00:08:57,400 Speaker 3: top tech names that you say, you know, we should 150 00:08:57,679 --> 00:08:59,880 Speaker 3: we should acknowledge, but we should look elsewhere as well. 151 00:09:00,360 --> 00:09:03,640 Speaker 3: The two areas would be that until you get rate cuts, 152 00:09:03,679 --> 00:09:06,520 Speaker 3: you're probably not going to see small caps and some 153 00:09:06,559 --> 00:09:09,640 Speaker 3: of the mid caps perform. Well, you probably need to 154 00:09:09,679 --> 00:09:13,239 Speaker 3: see growth, you know, which is trending lower now stabilized, 155 00:09:13,280 --> 00:09:15,040 Speaker 3: and then start to kick back up. 156 00:09:15,400 --> 00:09:17,679 Speaker 4: That's when you'd see those rally. And then you know, 157 00:09:17,720 --> 00:09:18,240 Speaker 4: if you look at. 158 00:09:18,200 --> 00:09:22,240 Speaker 3: The earnings from you just can't compare the earnings from 159 00:09:22,800 --> 00:09:25,480 Speaker 3: average companies with what you see in tech. So you 160 00:09:25,520 --> 00:09:27,760 Speaker 3: know they don't give trophies to everyone for a reason. 161 00:09:27,840 --> 00:09:30,280 Speaker 3: The winners and get the trophies. 162 00:09:31,600 --> 00:09:34,920 Speaker 6: Well, indeed, I think that is actually I would say 163 00:09:36,440 --> 00:09:39,360 Speaker 6: I wouldn't. I hesitate that used to work hut mentality, 164 00:09:39,400 --> 00:09:43,400 Speaker 6: But indeed there is actually a chase after the trophy 165 00:09:44,480 --> 00:09:47,880 Speaker 6: companies because they have been delivering, That's no doubt about it. 166 00:09:47,920 --> 00:09:50,280 Speaker 6: But I totally agree with you in the sense that 167 00:09:50,360 --> 00:09:56,120 Speaker 6: mid cap space is actually looking increasingly attractive, especially if 168 00:09:56,520 --> 00:10:00,760 Speaker 6: the big cup do materialize, which will help to stabilized 169 00:10:00,760 --> 00:10:04,840 Speaker 6: the economy and also then helped to propel the earnings 170 00:10:04,840 --> 00:10:05,880 Speaker 6: of such companies. 171 00:10:06,240 --> 00:10:09,760 Speaker 1: Eddie, what are you hearing from clients right now, particularly 172 00:10:09,800 --> 00:10:14,480 Speaker 1: those in Singapore about the risk that may be overhanging 173 00:10:14,600 --> 00:10:16,880 Speaker 1: markets in the Asia Pacific right now? 174 00:10:18,320 --> 00:10:24,200 Speaker 6: Well, we are, apart from you inflation, corporate earnings. One 175 00:10:24,360 --> 00:10:28,680 Speaker 6: question we are getting quite faded is what happens if 176 00:10:28,760 --> 00:10:34,120 Speaker 6: Trump were to win the election, the president election this 177 00:10:34,200 --> 00:10:37,720 Speaker 6: time around? What happens if there's Trump two point zero? 178 00:10:38,840 --> 00:10:42,520 Speaker 6: So because we did actually we certainly publish a note 179 00:10:42,520 --> 00:10:46,600 Speaker 6: to talk about the potential implications of a Trump presidential win, 180 00:10:47,640 --> 00:10:51,079 Speaker 6: especially when we's talking about imposing sixty percent terrorists on 181 00:10:51,200 --> 00:10:54,800 Speaker 6: China and ten percent terrorists on the rest of the world. 182 00:10:54,960 --> 00:10:58,680 Speaker 6: So I think that increased uncertainty could actually tenpen sentiment 183 00:10:59,120 --> 00:11:04,480 Speaker 6: on Asia really assets. Now, having said that, this time 184 00:11:04,600 --> 00:11:08,480 Speaker 6: round could be different, and we must note that Trump 185 00:11:09,000 --> 00:11:11,360 Speaker 6: this is the second election. I mean, if Trumble the 186 00:11:11,400 --> 00:11:13,640 Speaker 6: windows will be the second term, that would be a 187 00:11:13,880 --> 00:11:18,440 Speaker 6: next election. So maybe perhaps he will be more willing 188 00:11:18,800 --> 00:11:23,000 Speaker 6: to cut deals as a businessman with China and the 189 00:11:23,040 --> 00:11:27,280 Speaker 6: other countries if it does serve the interest of the US. 190 00:11:27,920 --> 00:11:30,720 Speaker 3: Eddie we talked about an opinion piece by Mentioning Pay, 191 00:11:31,000 --> 00:11:34,400 Speaker 3: one of our columnists about how the US China relationship 192 00:11:34,440 --> 00:11:37,120 Speaker 3: is probably worse than the Cold War. Never mind what 193 00:11:37,240 --> 00:11:39,679 Speaker 3: he's getting at, but I'm curious, in your mind, do 194 00:11:39,679 --> 00:11:41,280 Speaker 3: you see it as a competition If I'm in a 195 00:11:41,360 --> 00:11:43,560 Speaker 3: race with someone or playing golf against somebody. You know, 196 00:11:43,679 --> 00:11:45,280 Speaker 3: I don't think it's life and death. I just want 197 00:11:45,280 --> 00:11:47,480 Speaker 3: to win. Is that what's happening between the US and 198 00:11:47,559 --> 00:11:51,040 Speaker 3: China or is it sort of deadly survival type of stuff. 199 00:11:52,679 --> 00:11:57,440 Speaker 6: Well, I would describe it as a strategic competition between 200 00:11:57,559 --> 00:12:02,760 Speaker 6: the two superpowers on several fronts. I mean, on the 201 00:12:02,800 --> 00:12:06,240 Speaker 6: military front, I think that's that's really something they are 202 00:12:06,280 --> 00:12:10,320 Speaker 6: actually walking a lot on. But on the technology front, 203 00:12:10,840 --> 00:12:15,920 Speaker 6: especially if you can see what the US has done 204 00:12:16,040 --> 00:12:20,319 Speaker 6: in terms of trying to block the export of technology 205 00:12:20,920 --> 00:12:25,720 Speaker 6: or semiconductor equipment to China to impede the progress in 206 00:12:25,840 --> 00:12:27,760 Speaker 6: terms of semiconductor for China. 207 00:12:29,120 --> 00:12:31,600 Speaker 3: Yeah, Eddie, thank you very much for taking the time 208 00:12:31,600 --> 00:12:34,200 Speaker 3: to be with us. Eddie Low, CIO of Maybank Group 209 00:12:34,360 --> 00:12:46,199 Speaker 3: Wealth Management. John Davey, founder and CEO and CIO a 210 00:12:46,240 --> 00:12:49,239 Speaker 3: lot of hats there, had his story of portfolio advisors, 211 00:12:49,440 --> 00:12:51,920 Speaker 3: So John, you better be good. That sounds like you've 212 00:12:51,960 --> 00:12:54,360 Speaker 3: got a lot of responsibility there. Great to have you 213 00:12:54,360 --> 00:12:57,240 Speaker 3: on the program, by the way. So look, people are 214 00:12:57,400 --> 00:13:01,040 Speaker 3: still looking at this market for a broadening out of 215 00:13:01,120 --> 00:13:04,439 Speaker 3: gains to kind of of declare it to be healthy, 216 00:13:04,600 --> 00:13:07,480 Speaker 3: the rally healthy. So let's consider where we are. The 217 00:13:07,559 --> 00:13:09,960 Speaker 3: S and P five hundred is up eighteen percent year 218 00:13:09,960 --> 00:13:13,240 Speaker 3: to date. The equal weight is now up five percent. 219 00:13:13,880 --> 00:13:16,880 Speaker 3: Now five percent halfway through the year is a pretty 220 00:13:16,920 --> 00:13:21,400 Speaker 3: good gain. The eighteen percent is great, but that's mainly 221 00:13:21,440 --> 00:13:23,320 Speaker 3: because of a secular growth story. 222 00:13:23,400 --> 00:13:27,080 Speaker 4: AI. So is the market doing what it should be 223 00:13:27,160 --> 00:13:29,760 Speaker 4: doing well? 224 00:13:29,840 --> 00:13:31,920 Speaker 2: I mean, that's a good question. I mean everyone's trying 225 00:13:31,960 --> 00:13:34,200 Speaker 2: to decipher, you know, what that you know, if that, 226 00:13:34,480 --> 00:13:38,320 Speaker 2: if that is you know, the correct path for both 227 00:13:38,360 --> 00:13:40,559 Speaker 2: those different sectors. I think the reality is that the 228 00:13:41,040 --> 00:13:44,319 Speaker 2: economy is normalize and after pretty strong, you know, a 229 00:13:44,360 --> 00:13:46,840 Speaker 2: couple of quarters. So we had a pretty good earning 230 00:13:46,880 --> 00:13:50,720 Speaker 2: season here in Q you know, earlier this past quarter, 231 00:13:50,760 --> 00:13:54,000 Speaker 2: earning's work up about nine percent. You know, I think 232 00:13:54,040 --> 00:13:56,440 Speaker 2: what the market is looking for is a rate cut 233 00:13:56,679 --> 00:13:58,520 Speaker 2: or two and here in the US at the end 234 00:13:58,559 --> 00:14:00,880 Speaker 2: of the day, I think that's what it's going to enable, 235 00:14:01,520 --> 00:14:03,800 Speaker 2: like the S and P four to eighty three, which 236 00:14:03,880 --> 00:14:08,560 Speaker 2: is the non magt the non magnet seven stocks, in 237 00:14:08,679 --> 00:14:11,120 Speaker 2: order for a to rally because as you mentioned, you know, 238 00:14:11,160 --> 00:14:13,600 Speaker 2: the equoid S ANDP just hasn't really moved as much 239 00:14:13,600 --> 00:14:17,560 Speaker 2: as the produ market, so you know, the markets are employing, 240 00:14:17,800 --> 00:14:21,360 Speaker 2: you know, rate cut and step in December north of 241 00:14:21,400 --> 00:14:24,800 Speaker 2: seventy percent probabilities. I think that's what we're going to 242 00:14:24,880 --> 00:14:27,720 Speaker 2: need for the market to prod now because after last 243 00:14:27,760 --> 00:14:31,320 Speaker 2: quarter strong earning season, that really didn't provide any sort 244 00:14:31,360 --> 00:14:32,760 Speaker 2: of tailwind to the market. 245 00:14:33,040 --> 00:14:35,680 Speaker 1: So the rate cut obviously would be predicated on the 246 00:14:35,720 --> 00:14:38,880 Speaker 1: notion that there is a slower growth going on. Earning 247 00:14:38,960 --> 00:14:43,120 Speaker 1: start tomorrow will hear from pepsi UH one of the names, 248 00:14:43,160 --> 00:14:45,640 Speaker 1: Delta Airlines another, and then the big banks on Friday. 249 00:14:45,640 --> 00:14:48,560 Speaker 1: Obviously that will be key. Is there the risk as 250 00:14:48,600 --> 00:14:51,280 Speaker 1: these companies begin to report and then offer guidance on 251 00:14:51,360 --> 00:14:53,680 Speaker 1: the future, that the street is going to have to 252 00:14:53,720 --> 00:14:58,480 Speaker 1: adjust expectations of future earnings growth given a slower growth 253 00:14:58,600 --> 00:15:00,320 Speaker 1: rate for the overall onomy. 254 00:15:01,480 --> 00:15:03,640 Speaker 2: Yeah, I think the bar was set pretty low. So 255 00:15:03,720 --> 00:15:05,920 Speaker 2: if you beat you know, last quarter, I think you 256 00:15:05,960 --> 00:15:08,760 Speaker 2: were rewarded. So the expected you know, growth rate of 257 00:15:08,800 --> 00:15:12,680 Speaker 2: this SMP, you know, per Bloomberg, you know your firm 258 00:15:12,760 --> 00:15:14,800 Speaker 2: is you know eight and a half percent, So that's 259 00:15:14,840 --> 00:15:17,600 Speaker 2: the highest since you know twenty twenty one. I think, look, 260 00:15:17,600 --> 00:15:20,200 Speaker 2: I I you know, I'm in the States, and there's 261 00:15:20,240 --> 00:15:22,960 Speaker 2: two things that really kind of kept the economy together. 262 00:15:23,040 --> 00:15:25,320 Speaker 2: One you had a pretty good labor market and you 263 00:15:25,320 --> 00:15:28,920 Speaker 2: had a very strong US consumer. The labor market is 264 00:15:28,920 --> 00:15:32,040 Speaker 2: starting to, you know, weaken on the margin, and the consumer, 265 00:15:32,480 --> 00:15:36,080 Speaker 2: I think after like four years of above elevated inflation 266 00:15:36,280 --> 00:15:39,440 Speaker 2: is starting to get tapped out. So those two I 267 00:15:39,440 --> 00:15:42,520 Speaker 2: think held the economy together, and those two things weakened 268 00:15:42,560 --> 00:15:44,880 Speaker 2: on the margin is what you know, in the end 269 00:15:44,880 --> 00:15:46,400 Speaker 2: of the day, is going to cause the FED. I 270 00:15:46,400 --> 00:15:49,600 Speaker 2: think the cut rates. We have some pretty decent commercial 271 00:15:50,360 --> 00:15:52,960 Speaker 2: real estate issues here in the US. You know, regional 272 00:15:53,000 --> 00:15:55,000 Speaker 2: banks have lunt that a lot of money. So I 273 00:15:55,000 --> 00:15:57,640 Speaker 2: wouldn't say even though the Max seven keeps going up 274 00:15:57,640 --> 00:16:00,360 Speaker 2: and drives S and P, that isn't represent of the 275 00:16:00,400 --> 00:16:02,880 Speaker 2: broader economy. So I do think that a lot of 276 00:16:02,920 --> 00:16:06,400 Speaker 2: these indicties we look at are showing signs of softening, 277 00:16:06,880 --> 00:16:08,760 Speaker 2: and you know, we're at the point in the cycle 278 00:16:08,760 --> 00:16:11,320 Speaker 2: where the FED you know, needs to cut and would 279 00:16:11,320 --> 00:16:12,640 Speaker 2: have cut in pro cycles. 280 00:16:13,680 --> 00:16:16,760 Speaker 3: It's really hard to get a good strong read on 281 00:16:16,840 --> 00:16:19,080 Speaker 3: this because you have a number of companies, a lot 282 00:16:19,080 --> 00:16:22,480 Speaker 3: of companies that have vastly underperformed, and these are big 283 00:16:22,600 --> 00:16:26,680 Speaker 3: name companies like Home Depot and PepsiCo and McDonald's. They're 284 00:16:26,760 --> 00:16:30,920 Speaker 3: down here today some you know, either flat to down 285 00:16:31,360 --> 00:16:35,560 Speaker 3: sixteen eighteen, twenty percent. Then you have other consumer facing 286 00:16:35,640 --> 00:16:41,000 Speaker 3: companies like Apple, like Walmart, like Costco that are at 287 00:16:41,040 --> 00:16:44,680 Speaker 3: all time highs. So I guess in the way there 288 00:16:44,720 --> 00:16:48,440 Speaker 3: are some idiosyncratic stories and it's a stock pickers market. 289 00:16:50,800 --> 00:16:53,880 Speaker 2: Yeah, I think that's that's all, you know, very valid point. 290 00:16:54,000 --> 00:16:56,760 Speaker 2: You know, our point at a story advisors. You know, 291 00:16:56,800 --> 00:16:59,320 Speaker 2: we're global investors, will multi asset. You know, we think 292 00:16:59,320 --> 00:17:01,920 Speaker 2: there's a lot of opportunities. You know, emerging markets. Nobody 293 00:17:01,920 --> 00:17:05,520 Speaker 2: talks about it. It's like people forgot about you know, China, India, 294 00:17:05,920 --> 00:17:08,919 Speaker 2: you know em the MSAI Emerging market ETF is at 295 00:17:08,920 --> 00:17:11,040 Speaker 2: a fifty two week high. It's up ten percent. 296 00:17:10,840 --> 00:17:11,360 Speaker 4: Year to date. 297 00:17:11,800 --> 00:17:14,440 Speaker 2: You know, you get that valuation buffer, right because these 298 00:17:14,480 --> 00:17:18,320 Speaker 2: things traded much lower multiple compared to the SMP, which 299 00:17:18,359 --> 00:17:20,480 Speaker 2: is at you know, twenty and a half forward earnings. 300 00:17:20,760 --> 00:17:23,280 Speaker 2: So you know, we're just telling investors like look abroad, 301 00:17:23,359 --> 00:17:25,800 Speaker 2: you know, there's a lot of interesting opportunities in Japan. 302 00:17:25,920 --> 00:17:29,919 Speaker 2: Nobody you know, again, everyone wants to be infactuated at 303 00:17:29,920 --> 00:17:32,080 Speaker 2: the max seven, but there's a lot of opportunities even 304 00:17:32,080 --> 00:17:34,640 Speaker 2: in the you know, commodities market. You know, we're big 305 00:17:34,680 --> 00:17:37,600 Speaker 2: proponents of real assets. If you look at silver, it's 306 00:17:37,640 --> 00:17:39,720 Speaker 2: up twenty nine percent year to date, gold is up 307 00:17:39,760 --> 00:17:42,760 Speaker 2: fourteen percent. You wouldn't think that precious metals would be 308 00:17:42,880 --> 00:17:45,920 Speaker 2: doing good, you know, when the SMP is up so much. 309 00:17:45,960 --> 00:17:48,720 Speaker 2: But I think you know, investors see that there is 310 00:17:48,760 --> 00:17:50,960 Speaker 2: a week in an economy and that's typically when you know, 311 00:17:51,000 --> 00:17:53,399 Speaker 2: precious metals would do well, along with the fact that 312 00:17:53,400 --> 00:17:54,560 Speaker 2: they're inflation hedges. 313 00:17:55,080 --> 00:17:58,320 Speaker 1: So it seems as though a story of portfolio advisors 314 00:17:58,400 --> 00:18:01,119 Speaker 1: uses a lot of quantitative rest. Can we get away 315 00:18:01,119 --> 00:18:03,280 Speaker 1: from that for a moment and talk about the election 316 00:18:03,359 --> 00:18:06,120 Speaker 1: and whether this, with all the uncertainty that we've been 317 00:18:06,160 --> 00:18:08,080 Speaker 1: dealing with as a part of the current news cycle, 318 00:18:08,119 --> 00:18:09,560 Speaker 1: that there is a risk of a lot more in 319 00:18:09,600 --> 00:18:11,879 Speaker 1: the way of volatility between now and November. 320 00:18:14,160 --> 00:18:17,720 Speaker 2: Yeah, Elections, you know typically result in higher volatility. You know, 321 00:18:17,760 --> 00:18:20,040 Speaker 2: I would say that, you know, the kind of the 322 00:18:20,480 --> 00:18:24,000 Speaker 2: Republican winners stocks, right, there's baskets of stocks that kind 323 00:18:24,000 --> 00:18:27,240 Speaker 2: of benefit from you know, Republican victory. You know, they've 324 00:18:27,240 --> 00:18:30,280 Speaker 2: been rallying, you know significantly. You know, if you look 325 00:18:30,320 --> 00:18:33,200 Speaker 2: at Mexico, how Mexico's doing. I think our conclusion, our 326 00:18:33,240 --> 00:18:36,439 Speaker 2: story is regardless of who wins, I think we're going 327 00:18:36,480 --> 00:18:40,360 Speaker 2: to still be having like deficit issues. So we do 328 00:18:40,520 --> 00:18:43,160 Speaker 2: like owning real assets. We do like continue to own 329 00:18:43,240 --> 00:18:47,160 Speaker 2: gold because I don't see that I see higher inflation 330 00:18:47,280 --> 00:18:50,679 Speaker 2: regardless of who wins. But you certainly expect higher volatility. 331 00:18:51,080 --> 00:18:52,600 Speaker 2: You know that's going to start to pick up in 332 00:18:52,640 --> 00:18:56,760 Speaker 2: September October. I think there's some you know, lower volatility 333 00:18:56,960 --> 00:18:59,639 Speaker 2: here in the States because of like the Gamma profiles, 334 00:18:59,640 --> 00:19:04,280 Speaker 2: which is keeping realized volatility low. So implied volatility has 335 00:19:04,320 --> 00:19:07,679 Speaker 2: to track realized volatility. So you know, that's kind of 336 00:19:07,840 --> 00:19:10,480 Speaker 2: you know, a technical issue, but no doubt if you 337 00:19:10,560 --> 00:19:14,240 Speaker 2: start seeing you know, if there's a change in a republic, 338 00:19:14,359 --> 00:19:16,880 Speaker 2: the Democratic Party, that will lead to more and certanty. 339 00:19:16,960 --> 00:19:19,119 Speaker 2: More in Certanty will lead to higher volatility. 340 00:19:20,119 --> 00:19:21,800 Speaker 3: I'm hearing from a lot of guests that you know, 341 00:19:21,840 --> 00:19:26,600 Speaker 3: doesn't really matter too much that money is chasing equities 342 00:19:26,600 --> 00:19:30,960 Speaker 3: here because of earnings, upward revisions and such. Are there 343 00:19:30,960 --> 00:19:34,040 Speaker 3: some themes somewhere in there other than the ones you mentioned, 344 00:19:34,560 --> 00:19:38,520 Speaker 3: particularly in the high tech area, that you like, where 345 00:19:38,560 --> 00:19:43,040 Speaker 3: you're seeing companies raise their earnings projections. 346 00:19:43,720 --> 00:19:45,560 Speaker 2: Well, that's the funny thing is that if you look, 347 00:19:45,600 --> 00:19:48,040 Speaker 2: I mean, we've had a pretty strong broaden out of 348 00:19:48,080 --> 00:19:52,320 Speaker 2: this earnings recovery. And usually when you've got an earnings recovery, 349 00:19:52,840 --> 00:19:55,960 Speaker 2: that usually leads to you know, investors kind of rotating 350 00:19:55,960 --> 00:19:58,880 Speaker 2: away from defensives. So I look at like the MAC 351 00:19:58,960 --> 00:20:02,400 Speaker 2: seven as a very defense to play. You know, these 352 00:20:02,400 --> 00:20:06,359 Speaker 2: are like high cash flow producing companies, but if you 353 00:20:06,400 --> 00:20:09,480 Speaker 2: have more earnings growth, you know, there's a lot more opportunities. 354 00:20:09,680 --> 00:20:12,720 Speaker 2: There's something like one hundred and sixty companies in SMP 355 00:20:12,840 --> 00:20:15,560 Speaker 2: that have had twenty five percent earnings growth, so you 356 00:20:15,600 --> 00:20:18,800 Speaker 2: should be brought in out of your portfolio. You know, 357 00:20:18,840 --> 00:20:22,679 Speaker 2: the ECO way to SMP is you know, fifteen sixteen 358 00:20:22,760 --> 00:20:25,720 Speaker 2: p racial seventeen p racial, so you get a little 359 00:20:25,720 --> 00:20:29,080 Speaker 2: bit of like a discount compared to like the broader SMP. 360 00:20:29,240 --> 00:20:30,760 Speaker 2: And then if you go into like you know, things 361 00:20:30,760 --> 00:20:33,720 Speaker 2: like Japan emerge market, so you can lower it pretty significantly. 362 00:20:34,160 --> 00:20:36,840 Speaker 2: But you know, I would definitely be rotating out of 363 00:20:37,280 --> 00:20:40,080 Speaker 2: you know, those heavy Max seven stocks. They've had a 364 00:20:40,080 --> 00:20:42,600 Speaker 2: tremendous run, and you know, these things never stay at 365 00:20:42,640 --> 00:20:44,480 Speaker 2: the top of the dux forever John. 366 00:20:44,560 --> 00:20:44,879 Speaker 4: Thank you. 367 00:20:44,960 --> 00:20:57,600 Speaker 3: John Davey, founder CEO CIO at Estorio Portfolio Advisories. Joining 368 00:20:57,680 --> 00:21:00,359 Speaker 3: us in our studio is far some discussion of tech 369 00:21:00,440 --> 00:21:04,400 Speaker 3: is Lad Savov, Bloomberg Tech Editor to field questions from 370 00:21:04,440 --> 00:21:07,920 Speaker 3: dug and myself. Lad, thank you very much for coming in. 371 00:21:08,400 --> 00:21:11,000 Speaker 3: So a couple of stories here, definitely getting some attention. 372 00:21:11,440 --> 00:21:15,960 Speaker 3: Apple looking to ship some ninety million iPhone sixteen devices 373 00:21:16,000 --> 00:21:18,159 Speaker 3: in the latter half of this year, that said to 374 00:21:18,160 --> 00:21:21,120 Speaker 3: be a ten percent pickup on some of the previous models. 375 00:21:21,359 --> 00:21:26,920 Speaker 3: And then TSMC's second quarter sales up forty percent. Forty percent, Lad, 376 00:21:27,280 --> 00:21:30,359 Speaker 3: that was the fastest patience twenty twenty two. Now a 377 00:21:30,400 --> 00:21:33,720 Speaker 3: lot of investors are worried that we might see a slowdown. 378 00:21:33,840 --> 00:21:37,800 Speaker 3: Here you have an example from TSMC that sales are 379 00:21:37,800 --> 00:21:40,359 Speaker 3: actually going up. Still, what do you make of it? 380 00:21:40,640 --> 00:21:44,080 Speaker 7: Well, that's right, Brian, for TSMC is kind of the 381 00:21:44,080 --> 00:21:47,240 Speaker 7: bottom of the funnel when it comes to ODAI excitement 382 00:21:47,280 --> 00:21:50,040 Speaker 7: and AI boom. When you think about Nvidia and is 383 00:21:50,080 --> 00:21:53,240 Speaker 7: skyrocketing shape price, Well, Nvidio only has one supplier and 384 00:21:53,280 --> 00:21:57,520 Speaker 7: that's TSMC. Nobody makes the Nvidia AI accelerates. Is that 385 00:21:57,720 --> 00:22:01,919 Speaker 7: are the vang god of the aiboom other than TSMC. 386 00:22:01,960 --> 00:22:04,280 Speaker 7: That's a great position to be in. And when you 387 00:22:04,320 --> 00:22:09,120 Speaker 7: look at people signally some quotion about Nvidia and about 388 00:22:09,160 --> 00:22:12,000 Speaker 7: its future growth prospects, Well, I don't see the same 389 00:22:12,000 --> 00:22:15,040 Speaker 7: thing with TSMC, because whoever succeeds in Vidia is most 390 00:22:15,160 --> 00:22:18,280 Speaker 7: likely to go and be TSMC's customer. Again, so it's 391 00:22:18,320 --> 00:22:20,840 Speaker 7: just an ongoing thing. And to the point with Apple 392 00:22:20,920 --> 00:22:23,920 Speaker 7: and it's rising prospects for an next generation of iPhone. 393 00:22:24,119 --> 00:22:25,520 Speaker 7: Guess who makes Apple chips? 394 00:22:26,560 --> 00:22:31,520 Speaker 1: I guess that's TSMC, same company. Yeah, So the commonality 395 00:22:31,560 --> 00:22:35,440 Speaker 1: here is the AI trade and Apple has been very 396 00:22:35,480 --> 00:22:40,600 Speaker 1: ambitious in designing a program that would be compatible with 397 00:22:41,160 --> 00:22:44,080 Speaker 1: only Apple devices. Do you think Apple is going to 398 00:22:44,119 --> 00:22:47,080 Speaker 1: really stand apart? One of the things about this company 399 00:22:47,119 --> 00:22:49,640 Speaker 1: that may be late to the game when certain trends 400 00:22:49,760 --> 00:22:53,119 Speaker 1: establish themselves, but they have a real good track record 401 00:22:53,160 --> 00:22:57,640 Speaker 1: at perfecting technology, especially for the consumer. Do you think 402 00:22:57,680 --> 00:22:59,920 Speaker 1: that will hold up with the iPhone six? 403 00:23:01,720 --> 00:23:04,560 Speaker 7: That's right, and honestly, we're going to have to wait 404 00:23:04,600 --> 00:23:06,520 Speaker 7: and see. One of the ways that I think about 405 00:23:06,520 --> 00:23:09,679 Speaker 7: this is whether Apple would be introducing a features today 406 00:23:09,760 --> 00:23:12,639 Speaker 7: if it wasn't for chat GPT and the entire wave 407 00:23:12,680 --> 00:23:16,280 Speaker 7: that chat GPT kickstarted. Frankly, if you're Apple, just as 408 00:23:16,280 --> 00:23:18,840 Speaker 7: a business, you don't have the option to come up 409 00:23:19,200 --> 00:23:22,960 Speaker 7: to the tail end of this year. And think about it, 410 00:23:22,960 --> 00:23:25,880 Speaker 7: the fhlone sixteen means all of twenty twenty five. Essentially, 411 00:23:26,080 --> 00:23:27,640 Speaker 7: you don't have the option to go into twenty twenty 412 00:23:27,680 --> 00:23:30,600 Speaker 7: five without AI features. So think about this question, which 413 00:23:30,600 --> 00:23:32,359 Speaker 7: I don't have a clear answer to. Would Apple be 414 00:23:32,359 --> 00:23:35,560 Speaker 7: introducing all these AF features this year if it had 415 00:23:35,560 --> 00:23:38,440 Speaker 7: its own way, Probably not, because when you look across 416 00:23:38,480 --> 00:23:42,159 Speaker 7: the spectrum of what services are actually being released and 417 00:23:42,560 --> 00:23:46,040 Speaker 7: unveiled under this AI label, they're very disparate. There isn't 418 00:23:46,200 --> 00:23:49,399 Speaker 7: a clear through line of what consumers really want and 419 00:23:49,480 --> 00:23:50,960 Speaker 7: demand as far as AI goes. 420 00:23:51,760 --> 00:23:54,560 Speaker 3: And also Samsung is another key story today that we've 421 00:23:54,560 --> 00:23:58,720 Speaker 3: talked about a little bit. Samsung is raising prices, so 422 00:23:58,760 --> 00:24:04,160 Speaker 3: that's one thing, and then also betting more on artificial intelligence, 423 00:24:04,440 --> 00:24:09,240 Speaker 3: particularly on you know, advancing its foldable phone. So what 424 00:24:09,280 --> 00:24:10,879 Speaker 3: do you make of those developments? 425 00:24:11,160 --> 00:24:15,200 Speaker 7: That's right well sitting here and just waiting for our conversation, Brian, 426 00:24:15,280 --> 00:24:17,119 Speaker 7: I thought of this. There is no plan B. They 427 00:24:17,280 --> 00:24:19,879 Speaker 7: just plan AI. As far as the entire tech industry. 428 00:24:20,080 --> 00:24:21,680 Speaker 4: That's a good one. Okay, we'll give you credit. 429 00:24:21,760 --> 00:24:23,280 Speaker 1: I was inspired by you, Bran Sitting. 430 00:24:24,000 --> 00:24:25,840 Speaker 4: I'm sure you wrote that because you don't steal. 431 00:24:26,800 --> 00:24:29,840 Speaker 7: Well, think about it. Microsoft is making a huge push 432 00:24:29,880 --> 00:24:33,920 Speaker 7: with its co Pilot software for Windows in the autumn 433 00:24:33,920 --> 00:24:36,480 Speaker 7: and into the winter, into the holiday season. Apple with 434 00:24:36,560 --> 00:24:39,399 Speaker 7: Apple Intelligence with the iPhone sixteen we just discussed, and 435 00:24:39,400 --> 00:24:43,960 Speaker 7: then Samsung likewise. Because when it comes to hardware, these devices, 436 00:24:43,960 --> 00:24:47,359 Speaker 7: whether it's laptops or smartphones, even photo smartphones, are largely 437 00:24:47,440 --> 00:24:48,880 Speaker 7: mature or you can do is make them a little 438 00:24:48,920 --> 00:24:51,040 Speaker 7: bit thinner, a little bit lighter. And the way that 439 00:24:51,080 --> 00:24:54,359 Speaker 7: you can really spark more interest from consumers is to 440 00:24:54,359 --> 00:24:57,119 Speaker 7: say we have these unique new features, these AI features 441 00:24:57,200 --> 00:24:59,480 Speaker 7: that you're really going to want, your friends are going 442 00:24:59,480 --> 00:25:00,560 Speaker 7: to have, and you are really going. 443 00:25:00,440 --> 00:25:02,640 Speaker 4: To talk quickly. Is a smart ring going too far? 444 00:25:03,640 --> 00:25:03,840 Speaker 1: Well? 445 00:25:03,920 --> 00:25:05,840 Speaker 7: Smart rings have been around for a while. And the 446 00:25:05,920 --> 00:25:08,600 Speaker 7: interesting thing with Samson is because of its scale and 447 00:25:08,640 --> 00:25:11,160 Speaker 7: it's rich, it can popularize it. It can make them 448 00:25:11,280 --> 00:25:14,880 Speaker 7: a genuine category. And again, much like the AI features, 449 00:25:14,880 --> 00:25:16,880 Speaker 7: that kind of needs to prove itself over the course 450 00:25:16,880 --> 00:25:17,280 Speaker 7: of time. 451 00:25:17,600 --> 00:25:21,920 Speaker 1: I think that the wearable market, particularly where telemedicine is involved, 452 00:25:22,119 --> 00:25:24,919 Speaker 1: is in the early stages here. I think there's a 453 00:25:24,960 --> 00:25:28,639 Speaker 1: lot to be gleaned as we look at what Apple 454 00:25:28,720 --> 00:25:30,720 Speaker 1: is doing in terms of medtech. 455 00:25:32,280 --> 00:25:36,359 Speaker 7: Sure, and Samsung's advantage is the fact that Apple doesn't 456 00:25:36,400 --> 00:25:39,800 Speaker 7: have a product there. Samsung wants to be in these 457 00:25:39,800 --> 00:25:41,639 Speaker 7: spaces that Apple doesn't yet occupy. 458 00:25:41,720 --> 00:25:43,600 Speaker 1: Well, you could make the case that the watch, I 459 00:25:43,640 --> 00:25:46,240 Speaker 1: mean it is basically a wearable device. I mean, whether 460 00:25:46,280 --> 00:25:49,239 Speaker 1: it's a ring or a watch, you're monitoring, you know, 461 00:25:50,240 --> 00:25:54,560 Speaker 1: skin temperature, You're you're monitoring a person's sleep cycle, You're monitoring. 462 00:25:54,800 --> 00:25:57,399 Speaker 1: It's a sensor basically on the human body. In what 463 00:25:57,560 --> 00:25:59,840 Speaker 1: form we can debate, but I think that Apple re 464 00:26:00,480 --> 00:26:03,040 Speaker 1: the potency of the watch as something that could be 465 00:26:03,040 --> 00:26:04,879 Speaker 1: a bridge to telemedicine. 466 00:26:06,200 --> 00:26:10,320 Speaker 7: Absolutely, And I think the big test with samsung new products, 467 00:26:10,359 --> 00:26:13,560 Speaker 7: whether it's the Galaxy Ring or is new six hundred 468 00:26:13,600 --> 00:26:17,200 Speaker 7: and fifty dollars Galaxy Watch Ultra, which goes up against 469 00:26:17,200 --> 00:26:19,600 Speaker 7: the eight hundred dollars Apple Watch Ultra, is to test 470 00:26:19,600 --> 00:26:21,919 Speaker 7: how much consumers are going to be willing to spend 471 00:26:21,920 --> 00:26:24,640 Speaker 7: for these things. We know that people like health tracking, 472 00:26:25,600 --> 00:26:28,160 Speaker 7: we know that they like health metrics, But how far 473 00:26:28,359 --> 00:26:30,600 Speaker 7: is that budget going to stretch for those devices. 474 00:26:30,880 --> 00:26:34,600 Speaker 3: We started off by talking about TSMC, and you correctly 475 00:26:34,640 --> 00:26:37,119 Speaker 3: pointed out that it's really at the center of a 476 00:26:37,160 --> 00:26:41,080 Speaker 3: lot of things, particularly with semiconductors, and that's fast becoming, 477 00:26:41,119 --> 00:26:44,760 Speaker 3: if it isn't already the most important industry in the world. 478 00:26:45,119 --> 00:26:48,200 Speaker 3: The tricky part is it's in Taiwan, very close a 479 00:26:48,280 --> 00:26:51,800 Speaker 3: stone's throw from China. Have you been monitoring that relationship. 480 00:26:51,840 --> 00:26:54,600 Speaker 3: We just had ed talking about how some ships and 481 00:26:54,640 --> 00:26:57,320 Speaker 3: planes have entered the airspace of Taiwan. 482 00:26:57,400 --> 00:26:58,040 Speaker 4: What do you make of that? 483 00:26:58,920 --> 00:27:02,920 Speaker 7: Well, that's been an open question. The really striking thing 484 00:27:02,960 --> 00:27:04,960 Speaker 7: to me, I like to think of Taiwan as like 485 00:27:05,000 --> 00:27:08,000 Speaker 7: a seven trillion dollar island, because I just mentioned it. 486 00:27:08,480 --> 00:27:12,240 Speaker 7: Without Taiwan and without CSMC specifically and its production in Taiwan, 487 00:27:12,520 --> 00:27:15,600 Speaker 7: there is no Nvidia Ai chips, there is no iPhone, 488 00:27:15,800 --> 00:27:18,240 Speaker 7: so there's a lot of stake. But all these companies 489 00:27:18,280 --> 00:27:21,359 Speaker 7: seem to be investing both their businesses and money and 490 00:27:21,400 --> 00:27:23,280 Speaker 7: faith in Taiwan going forward. 491 00:27:24,040 --> 00:27:26,320 Speaker 3: Excellent, Glad, Thank you so much for joining us here 492 00:27:26,359 --> 00:27:27,280 Speaker 3: in our studios. 493 00:27:27,320 --> 00:27:30,359 Speaker 4: It's always interesting. Glad Salvov bloom Chech. 494 00:27:30,320 --> 00:27:35,520 Speaker 1: Editor This has been the Bloomberg Daybreak Asia podcast, bringing 495 00:27:35,520 --> 00:27:38,000 Speaker 1: you the stories making news and moving markets in the 496 00:27:38,000 --> 00:27:41,919 Speaker 1: Asia Pacific. Visit the Bloomberg Podcast channel on YouTube to 497 00:27:41,960 --> 00:27:45,200 Speaker 1: get more episodes of this and other shows from Bloomberg. 498 00:27:45,440 --> 00:27:49,359 Speaker 1: Subscribe to the podcast on Apple, Spotify, or anywhere else 499 00:27:49,400 --> 00:27:52,600 Speaker 1: you listen and always on Bloomberg Radio, the Bloomberg Terminal, 500 00:27:52,800 --> 00:27:54,160 Speaker 1: and the Bloomberg Business app.